UPDATE: A less pessimistic view, here.
Not that it matters, I think the price of polysilicon will drop as fast as module prices, thus maintaining margins for efficient manufacturers. A large enough decline in module prices would open massive new buying in countries like China and India. For the China play you have to wonder if the Chinese producers would have an edge.
Solar stocks were pummeled on Monday as investors fretted that an oversupply of solar panels next year will drive down prices and profit margins in the high-flying sector.
The sell-off added to several straight days of losses for the industry, which has been spurned by investors this year after a sharp run-up in 2007 that sent price-to-earnings ratios soaring.
The recent weakness stems from investor worries that supplies of solar panels will outpace demand next year, driving down prices and trimming margins....MORE
Oregon, which weathered the tech boom and bust, may be headed for bubble trouble in solar manufacturing.
Experts predict a worldwide glut of solar panels and a short-term shakeout of the U.S. sun-power industry that could slow investment in factories of the type state officials are scrambling to attract.
Some solar companies are laying off workers as U.S. and foreign government incentives approach expiration, and as manufacturers in China and elsewhere rush to meet rising demand.
Edwin Koot, a respected solar analyst in the Netherlands, recently issued a report predicting a global surplus of the panels, or modules, that convert sunshine into electricity.
"The industry simply is growing too fast compared to the demand side," says Koot (pronounced "coat"), founder and chief executive of SolarPlaza, a Rotterdam consultancy. "There are too many companies on the market."
No one discredits projections of long-term growth in demand for solar systems. But, as happens often in emerging markets, manufacturers apparently are flocking to the technology faster than consumers. In the next few years, experts suggest, they face a big hiccup.
To be sure, it's early to project with any certainty a bubble in a relatively tiny industry with comparatively high costs that stifle competition with conventional energy. Solar optimists also point out that a panel glut could force down prices and increase sales.
Tim McCabe, director of the Oregon Economic and Community Development Department, is unfazed by predictions of a panel surplus and slowdown in the bellwether California market, whose proximity helps his agency attract a growing number of manufacturers....MORE
From Climateer Investing:
That headline is a quote, I couldn't make it up. This either:
In many cases, the incentives and credits paid end up being more than the actual cost of the system.
Alrighty then, time to hit the Oregon Trail.